Big Box Retail Stores going the way of the dodo?

I remember when I was a few years younger about 18 at the time and needed money for whatever an 18 year old needs money for. I had a sales associate job with a company whose name I will not divulge for the privacy of the company. Although I can tell you that the name rhymes with ‘Best Buy’. The job was one of the less enjoyable ones that I have held, I always thought this was a problem because of bad management but now I realize that the problem was bigger than the store management. The problem with the company was how the operations were structured; the operations encouraged a high rate of turn over and a low level of employee morale. I was of course, an employee.

 

As a sales associate my job was to sell product for the store. Sales were tracked by the amount of units an associate sold, but this was not the most important statistic that was viewed. You see, computers are not very profitable for a store to sell. The store either breaks even or looses a few dollars when selling a unit. “Mario, then how does a store stay in business with such an unprofitable model?” Well I’m glad you asked! You see, the managers instill in the employees that every single computer should be sold with an extended warranty, geek squad recovery discs, or a home instillation by a geek squad member. Best Buy all of these services are basically pure profit for the store and are the statistics that the managers are interested in. This is all fine. A company needs to make a profit, which is the essence of capitalism.

 

However, where the company falters is how these goals are incentivized. Managers view the ‘attachment’ numbers of employees like gospel. Employees that can sell are given more hours and ones who do not are phased out. There is a very high rate of employee turn over. The employees make an hourly rate no matter how much they sell or don’t sell. The managers earn a bonus depending on how many attachments are sold with the computers and how profitable these attachments are.  As one can infer this would create a rather hostile working environment between employees who can care less if a customer does not want recovery discs with their laptop because it does not affect them directly. While at the same time managers can be seen swooning whenever a customer declines additional services. Ultimately harsh words are said to the employee and the day goes on. As expected morale and company loyalty are either deplorable or nonexistent.

 

So, what do my fellow students think about the operations structure of this company? Do you agree with the structure to work employees with no incentive, a bad environment and bad morale? Or do you have any suggestions on how a company can go about to remedy this issue.  Can this be fixed or do you foresee more companies going the way of the dodo and Circuit City?

One thought on “Big Box Retail Stores going the way of the dodo?

  1. It’s amazing how Best Buy doesn’t have any incentive set to motivate their sales employee. As you mentioned what’s to stop an employee who just gets paid hourly not to push those products. Their incentive method is ineffective the least to say. It creates an uneasy work environment and favoritism amongst those who are hitting the marks an appease the managers only. I honestly don’t know how they even manage to keep the employees they have. I know when I go to Frys I see all the employees helping and going beyond my expectation. Their employee are fully compensated by commission.

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